BILL NUMBER: SB 1210	CHAPTERED  10/10/99

	CHAPTER   758
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 7, 1999
	PASSED THE SENATE   SEPTEMBER 10, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 9, 1999
	AMENDED IN ASSEMBLY   JULY 7, 1999
	AMENDED IN SENATE   APRIL 29, 1999
	AMENDED IN SENATE   APRIL 5, 1999

INTRODUCED BY   Senator Baca
   (Principal coauthors:  Senators Chesbro and Poochigian)
   (Principal coauthor:  Assembly Member Machado)
   (Coauthor:  Senator Costa)
   (Coauthors:  Assembly Members Alquist, Briggs, Campbell, Cardoza,
Granlund, Honda, Mazzoni, Oller, Reyes, Strom-Martin, Washington, and
Zettel)

                        FEBRUARY 26, 1999

   An act to amend Section 6364 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1210, Baca.  Sales and use taxes:  exemptions:  returnable and
nonreturnable containers.
   The Sales and Use Tax Law imposes a tax on the gross receipts from
the sale in this state of, or the storage, use, or other consumption
in this state of, tangible personal property.  That law provides
various exemptions from that tax, including an exemption for
returnable and nonreturnable containers under specified conditions.
   This bill would add an exemption for containers when sold or
leased to persons who place food products for human consumption in
the container for shipment, provided the food products will be sold,
whether in the same container or not, and whether the food products
are remanufactured or repackaged prior to sale.
   This bill would state the Legislature's intent in enacting the
bill.
   Counties and cities are authorized to impose local sales and use
taxes in conformity with state sales and use taxes.  Exemptions from
state sales and use taxes enacted by the Legislature are incorporated
into the local taxes.
   Section 2230 of the Revenue and Taxation Code provides that the
state will reimburse counties and cities for revenue losses caused by
the enactment of sales and use tax exemptions.
   This bill would provide that, notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for sales and use tax revenues
lost by them pursuant to this bill.
  This bill would take effect immediately as a tax levy, but its
operative date would depend on its effective date.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The California Constitution exempts food products for human
consumption from sales or use tax.
   (b) California's agricultural food production and processing
industries are experiencing significant adversities caused by extreme
freezing temperatures and extreme weather patterns, as El Nino and
La Nina.
   (c) Nineteen other states exempt food containers from sales tax,
placing California growers and food processors at a competitive
disadvantage.
   (d) Food containers originating from foreign countries are exempt
from sales tax, placing California growers and food processors at a
competitive disadvantage.
   (e) Much of California's food production is seasonal.
   (f) Advances in food container technology and business practices
have made food containers more recyclable.
   (g) By encouraging the use of reusable food containers, the
environment will benefit through increased use of recyclable food
containers and waste reduction.
   (h) In order to ensure that food containers are clearly treated
the same as food for sales tax purposes, during the upcoming spring
and summer seasons, it is necessary that this revision be made in the
Sales and Use Tax Law.
  SEC. 2.  Section 6364 of the Revenue and Taxation Code is amended
to read:
   6364.  There are exempted from the taxes imposed by this part, the
gross receipts from the sale in this state of and the storage, use,
or other consumption in this state of:
   (a) Nonreturnable containers when sold without the contents to
persons who place the contents in the container and sell the contents
together with the container.
   (b) Containers when sold with the contents if the sales price of
the contents is not required to be included in the measure of the
taxes imposed by this part.
   (c) Returnable containers when sold with the contents in
connection with a retail sale of the contents or when resold for
refilling.
   (d) Containers, when sold or leased without the contents to
persons who place food products for human consumption in the
container for shipment, provided the food products will be sold,
whether in the same container or not, and whether the food products
are remanufactured or repackaged prior to sale.
   (e) For purposes of this section, "returnable containers" means
containers of a kind customarily returned by the buyer of the
contents for reuse.  All other containers are "nonreturnable
containers."
  SEC. 3.  Notwithstanding Section 2230 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any sales and use tax revenues lost by
it under this act.
  SEC. 4.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
However, the provisions of this act shall become operative on the
first day of the first calendar quarter commencing more than 90 days
after the effective date of this act.
